Winklevoss Capital, related to the Gemini exchange, has also invested in the Taxbit company.
Taxbit offers solutions to automate tax compliance on cryptocurrencies.
Tax compliance in the cryptocurrency market is becoming an increasingly important issue for companies that provide purchase and sale services. This has been demonstrated by the latest investment made by the Paypal and Coinbase firms, who have contributed their capital for the development of the Taxbit project.
A press release, published on January 7, confirmed that Paypal Ventures and Coinbase Ventures have become investors in this company dedicated to tax automation. Likewise, the firm Winklevoss Capital, owned by the Winklevoss brothers of the Gemini exchange, also decided to double the capital that it had previously contributed to Taxbit.
The statement did not specify how much money was contributed by each firm. However, Austin Woodward, CEO of Taxbit, noted that all this capital will allow them to continue innovating in tax technology and growing in the cryptocurrency market.
“Cryptocurrency is one of the most popular spaces in financial technology and it is rapidly becoming more widespread. Paypal and other global mega-companies are embracing the technology. We are rapidly scaling to meet the demand for exponential growth in our business offerings. “
Austin Woodward, CEO of Taxbit.
Ecosystem media suggests the possibility of that both PayPal and Coinbase are preparing for future Bitcoin regulation. By the time Paypal decided to incorporate bitcoin into its services, US tax attorney Stephen Turanchik commented that the company would face “a new accounting headache” when it came to paying taxes on its cryptocurrency transactions. The Internal Revenue Service (IRS) of the United States has declared that anyone who trades with bitcoins is obliged to declare them before the law, except those who use it as a savings method.
With the adoption and price of bitcoin constantly rising, the attention on the cryptocurrency will also grow and this could lead to regulators bringing new regulations to the market. Given this possibility, companies like Taxbit are an interesting and useful business proposal, since it is responsible for the creation of software to automate tax compliance for the purchase and sale of bitcoins and other cryptocurrencies; a practice that is difficult due to the volatility of these assets and the laws are often not entirely clear.
Made up of public accountants, tax lawyers and software developers, Taxbit presents itself as a firm that markets solutions so that consumers, companies, and even exchanges, can pay their cryptocurrency taxes with the greatest ease. The idea of Taxbit is that simplifying this process could increase the adoption of cryptocurrencies.
Countries such as Spain, Argentina, Chile and Brazil already have bills for future cryptocurrency regulations. Also, authorities such as FinCEN are looking for solutions that allow them to identify Bitcoin users. In this sense, it seems only a matter of time before a new regulatory regime is imposed on assets such as bitcoin.